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2022 (8) TMI 532 - HC - Income TaxPayment of interest u/s 244A on the amount of refund payable to the assessee - CIT(A) concluded that the claim of ‘interest’ by the respondent for the refund amounts to 'interest on interest' and held that it is beyond the scope of Section 244A - ITAT allowed the claim - contention of the Revenue that since the refunded amount was deposited by the assessee towards 'interest' due to the Revenue, any award of interest on the refund would amount to 'interest on interest' is factually incorrect - HELD THAT:- Revenue has not disputed that the payment of interest by the respondent u/s 234D and Section 220(2) was in pursuance of the demand raised by the Revenue, which demand subsequently has been found to be incorrect and the money has become due and payable by the Revenue to the assessee. It would be relevant to note here that in the judgment of Preeti N. Aggarwala [2017 (5) TMI 308 - DELHI HIGH COURT] the predecessor Division Bench took note of the pending reference to the larger Bench in Sutlej Industries Limited [2016 (1) TMI 1353 - DELHI HIGH COURT] and observed that the issue involved in the said reference pertains to refund of excess self assessment tax whereas, the issue determined in the judgment in Preeti N. Aggarwala (supra) was payment of interest on the amount of refund payable to the assessee u/s 220A. The issue arising in the present appeal is authoritatively answered by the predecessor Division Bench in Preeti N. Aggarwala [2017 (5) TMI 308 - DELHI HIGH COURT] and we do not find any substance in the contention of the learned counsel for the Revenue that present appeal must await the decision of the larger Bench. The said judgment was also followed by the Supreme Court in the case of Universal Cable [2019 (12) TMI 1081 - SC ORDER] to hold that there is reason to deny payment of interest to the deductor who has deducted the tax at source and deposited the same with the treasury. The Supreme Court rejected the submission of the Revenue that interest can only be granted to an assessee under Section 244A of the Act and not to a deductor of the tax at source. The judgment of the Supreme Court in the case of Gujarat Fluoro Chemicals [2013 (10) TMI 117 - SUPREME COURT] arose on issue as regards payment of interest in the event of the failure of Revenue to refund the interest payable within the statutory period. The Supreme Court held that it is the interest provided under the statute which may be claimed by an assessee from the Revenue and no other interest on statutory interest is payable. In the present case, as noted above, the assessee has been found entitled to refund of money deposited by it upon re-computation by the Revenue and interest thereon is liable to be paid under Section 244A(1)(b) as held by this Court in Preeti N. Aggarwala (supra).
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